Corporate group

About: Corporate group is a research topic. Over the lifetime, 1747 publications have been published within this topic receiving 46868 citations.

Business group heterogeneity and the internationalization-performance relationship: Evidence from Indian business groups

Abstract: Business groups, the dominant organizational form in many Asian markets, have expanded their operations into international markets. We combine the resources-based view with the institutional perspective to highlight the costs and benefits of business groups’ internationalization, rather than business groups’ affiliated firms’ internationalization, and consider how ownership heterogeneity among business groups influences the internationalization-performance relationship. Three ownership types—family, domestic financial institution, and foreign corporate—serve as distinguishing characteristics of business groups and potential moderators of this relationship. In a sample of 185 Indian business groups examined over more than a decade (2000–2010), we find that these three ownership types have a differential impact on the internationalization-performance relationship¸ depending on the level of internationalization of the business group. Specifically¸ we find that at lower levels of internationalization, family and foreign corporate ownership has a positive moderating effect whereas domestic financial institutional ownership has a negative moderating effect. Conversely¸ at higher levels of internationalization, family and foreign corporate ownership has a negative moderating effect, while domestic financial institutional ownership positively moderates the internationalization-performance relationship.

Financial Crisis and Firm Performance: empirical evidence from Turkey

Abstract: The objective of this study is to examine the impact of concentrated ownership and business group affiliation on the performance of Turkish firms during the financial crisis by controlling balance sheet currency exposure, international involvement and firm size. Our analysis focuses on a 12-month window encapsulating the February 2001 financial crisis. Our findings show that balance sheet exposure is the key determinant of the firm performance during the crisis periods. While we find evidence that firms with higher concentrated ownership experience lower stock market performance prior and during the financial crisis, business group affiliation does not have any impact on the performance. However, there is weak evidence that stock market performance increases with the level of business group diversification.

Pandora’s Box: Managerial Discretion and the Problem of Corporate Philanthropy

Abstract: Corporate giving to 501(c)(3) nonprofits (“charities”) is a more curious, varied and interesting phenomenon than commentators have recognized. Such “gifts” can be grouped generally into four categories. First, Giving to executives’ preferred charities represents an alternative form of compensation. Second, corporate philanthropy is often tied to the company’s commercial advertising, as a method of promoting consumer goodwill and sales. Thirdly, some corporate gifts may be motivated by their leaders’ desire to “give back” to the community, as an expression of corporate social responsibility. Finally, corporations may use contributions to politically enabled nonprofits, including think tanks and market-oriented/ “public interest” litigation boutiques, to influence regulation, and the political environment generally, in their favor. The paper’s seminal insight is that neither in corporate law nor elsewhere is there a regulatory regime that meaningfully constrains corporate executives’ discretion in employing corporate funds to these ends; nor is there even a meaningful disclosure requirement which would allow for public discussion and critique. Public corporations can give away many millions of dollars -- even to politically, ideologically, religiously “enabled” charities -- without leaving even a public record of so doing. From the perspective of corporate law, the darkness surrounding corporate giving is further problematic because it promotes the formation of nearly invisible networks of background social/professional ties (interlocking for-profit/nonprofit directorates) among corporate elites – affiliations which may compromise the executives’ good faith, independence in corporate decision making.

How Does Product Market Competition Interact with Internal Corporate Governance?: Evidence from the Korean Economy*

Abstract: In this study, we empirically test whether firms that belong to a business group (chaebol) behave differently from stand-alone firms in their decisions regarding internal corporate governance, given product market competition. The existing literature has ignored the possibility that firm characteristics may differentially affect this relationship. We find that the member firms of chaebol maintain better internal corporate governance in a non-competitive environment, whereas stand-alone firms do so in a competitive environment. We also find that the positive effects of internal corporate governance on firm value are stronger in a non-competitive environment for stand-alone firms, but not for affiliated firms. We ascribe the detected differences in corporate behavior and performance to differences in the level of competitive pressure to which firms are exposed. When we classify the firms by asset size or product market leadership, we observe a similar pattern, which also supports our conjecture.